GBP and gold benefit
European bank stress tests were widely criticised on Friday, with one analyst declaring it as bad as the 1979 Irish driving test. In 1979, in an effort to win votes the Irish government declared anyone who had taken their test twice and failed would automatically qualify for a licence – resulting in around 40% of the population driving without ever having passed their test!
This sentiment was shared across the market, with many deriding the fact that the stress tests never accounted for a country not paying its debt back, even as Greece teeters on the brink of default.
In the end, eight out of the 90 banks failed with five small regional Spanish banks, two Greek banks and one Austrian failing to make the grade, with another 16 banks only just scrapping through. On a positive note, all British banks were given a clean bill of health.
European leaders are due to gather in Brussels to discuss a second bailout for Greece on Thursday. The meeting will also discuss urgent measures to try and prevent contagion spreading to Italy and Spain, but with continuing differences about how best to tackle the crisis, reaching an agreement looks further away than ever.
George Papandreou, the Greek Prime Minister issued a rallying call for urgent and unified action stating “it is time Europe woke up”. If Europe doesn’t start taking decisive action we may have to start contemplating the unthinkable.
In markets overnight, the euro was under intense pressure with European dithering weighing on investor sentiment. The pound was trading at 1.1445 against the single currency, having been as low as 1.1062 only 2 weeks ago. The euro was also weaker against the dollar at 1.4049.
The dollar benefited from market jitters, with the pound lower against the greenback at 1.6073. Keep a close eye on US negotiations on raising its debt ceiling, with the August 2nd deadline fast approaching expect dollar volatility if the political deadlock between the Republicans and Democrats remains.
What does this all mean for me? Well buying your EUR, USD, AUD or any other currency at the wrong time could cost you a fortune. There is no crystal ball but Currency UK can give you the information you need to make an informed decision.
Currency UK will then offer you the best exchange rates available and ensure that you subsequent international transfers are handled as quickly and as efficiently as possible.
Contact us us now on +44 (0)20 7738 0777 or click here